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Attorney General, Lawmakers disagree on future of recovered funds

Earlier this week, Attorney General Jim Hood announced that the state has recovered over $33 million from a pharmaceutical company that had been caught defrauding the state by hiking up prices of prescription drugs.

Related: Pharmaceutical company owes $33 million for defrauding Mississippi

While everyone agrees that it is important to hold companies accountable, there is some disagreement about where the recovered money should go. In a media release issued by AG Hood’s office, he says that the funds should be given back to the state to benefit Mississippi’s funding in several areas. However, lawmakers may have a different idea for those funds.

“By way of House Bill 1475 this session, the Legislature is attempting to remove the prosecutorial powers of the Office of the Attorney General,”AG Hood said. “If this bill passes, the $30 million from Watson, in addition to the more than $3 billion recovered since Hood took office in 2004, would never make it to the state’s treasuries, which includes the General Fund, Budget Contingency Fund, State and School Insurance Fund, and Health Care Expendable Fund. HB 1475 aims to shift prosecutorial authority from the AG to members of the “Outside Counsel Oversight Commission,” which was created by the Legislature and made up of the governor, lieutenant governor, and secretary of state.

“The corporate crooks are salivating at some of the bills introduced by some legislators trying to protect their corporate benefactors instead of their fellow Mississippians.”

While HB 1475 (the bill mentioned by AG Hood) died in committee on Tuesday, the bill stated that the “Outside Counsel Commission” would be present in litigation that dealt with funds over $250,000.

In matters wherein the amount reasonably sought to be recovered by the state or arm or agency thereof exceeds the sum of Two Hundred Fifty Thousand Dollars ($250,000.00) inclusive of attorney’s fees, interest and costs, the Attorney General shall not file suit or otherwise assert such a claim or cause of action or employ special or outside counsel to file such suit or otherwise assert such a claim or cause or action, without the prior written approval of the Outside Counsel Oversight Commission as defined and provided for in Section 7-5-8. – HB 1475 

AG Hood countered that proposal by pointing to a section of the state constitution which gives the Attorney General’s Office the power to handle such cases.

“Section 173 of the Constitution provides for an independently elected attorney general with all the powers of the Attorney General at Common Law, including the power to bring, control and manage litigation on behalf of the state. Additionally, the Supreme Court has stated, “As to all litigation, the subject matter of which is of state-wide interest, the Attorney General alone has the right to represent the state.” [Kennington-Saenger Theatres v. State, 196 Miss. 841, 18 So. 2d 483, 486 (1944).]”

AG Hood also disagreed with HB 1238, a bill concerning the “Consumer Protection Act.” That bill did make its way through the committee stage. The bill aims to “clarify the exclusions of the provisions regulating the office of consumer protection; and for related purposes.” The bill claims it would do so by implementing the following:

(a) Done by the publisher, owner, agent or employee of a newspaper, periodical, printing shop, directory, website provider or radio or television station in the publication or dissemination of an advertisement, when the owner, agent or employee did not have knowledge of the false, misleading or deceptive character of the advertisement and did not have a direct financial interest in the sale or distribution of the advertised product or service.

(b) Done by any officer acting under the orders of any court.

(c) Permitted under laws of the State of Mississippi or the United States or under rules, regulations, or decisions interpreting such laws, including, but not limited to, acts or practices permitted or authorized by a state or federal regulatory agency tasked by statute to regulate such acts or practices. – HB 1238 

In his response to this bill, AG Hood says that Mississippians would be at risk if the bill makes it into law.

“Additionally, House Bill 1238, which passed out of committee last week, would allow companies who are federally regulated, such as Watson, to claim they do not fall under the Mississippi Consumer Protection Act. The Watson case was argued under that Act, and more than $5.2 million in civil penalties were recovered as part of the entire judgment.

“Should HB 1238 pass, it would be devastating to the protection of Mississippians, much of the successes in our office have been protecting consumers from corporate wrongdoers, and the people of Mississippi deserve more than their lawmakers stripping those protections,” AG Hood said.

HB 1238 has been placed on the House calendar.

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